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Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added...

Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the first process. During November, the first process transferred 765,000 units of product to the second process. Additional information for the first process follows. At the end of November, work in process inventory consists of 204,000 units that are 50% complete with respect to conversion. Beginning work in process inventory had $440,895 of direct materials and $151,725 of conversion cost. The direct material cost added in November is $2,950,605, and the conversion cost added is $2,882,775. Beginning work in process consisted of 78,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 78,000 were from beginning work in process and 687,000 units were started and completed during the period. Required: For the first process: 1. Determine the equivalent units of production with respect to direct materials and conversion. 2. Compute both the direct material cost and the conversion cost per equivalent unit. 3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

For the first process:
1. Determine the equivalent units of production with respect to direct materials and conversion.

2. Compute both the direct material cost and the conversion cost per equivalent unit.

3. Compute the direct material cost and the conversion cost assigned to units completed and transferred out and ending work in process inventory. (Round "Cost per EUP" to 2 decimal places.)

Solutions

Expert Solution

Victory Company
Production Cost Report
Actual Units
Calculation of Physical UNITS:
Units in beginning inventory            78,000
Units started during the period          765,000
Units to be accounted for          843,000
Actual Units
Units Completed and Transferred          639,000
Units in ending inventory          204,000
Total accounted for          843,000
Actual Units Equivalent Units
Material Conversion Cost
Units Completed and Transferred          639,000          639,000          639,000
Units in ending inventory          204,000          204,000          102,000
1) No. of Equivalent Units          843,000          843,000          741,000
Costs:
Material Conversion Cost Total
Costs in beginning inventory          440,895          151,725          592,620
Cost added during the year      2,950,605      2,882,775      5,833,380
Total cost to account for      3,391,500      3,034,500      6,426,000
Equivalent Units from above          843,000          741,000
2) Cost per equivalent unit 4.02 4.10
Material Conversion Cost Total
3) Cost Accounted for
Units completed and transfer      2,570,781      2,616,796      5,187,577
Units in ending inventory          820,719          417,704      1,238,423
   Total Cost Accounted for      3,391,500      3,034,500      6,426,000

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